HELSINKI – Ailing EMS firm Elcoteq will receive a cash infusion of China-based Kaifa of up to 50 million euros ($71 million).
 
In a press release today, Elcoteq said it would receive the cash from Kaifa, part of China Electronic Corp., in exchange for an undetermined number of shares. The deal would make CEC its largest shareholder, with a stake of at least 30%. The total size of the investment depends on the successful restructuring of Elcoteq's debt, with a final agreement expected to be signed in the third quarter.
 
The world’s sixth largest EMS company at the end of 2008, Elcoteq’s second-quarter sales dropped more than 50% to 436 million euros and the company posted an operating loss of 11.5 million euros in the second quarter. It was hurt by Nokia’s decision to build products in-house for the foreseeable future.
 
CEC has been Elcoteq's joint-venture partner in China since 2002. .